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City of Bell: Rizzo steered $700,000-plus to firms or individuals without approval, competitive bids or legal contracts, audit says

November 18, 2010 | 1:07
pm

Former Bell City Administrator Robert Rizzo improperly steered more than $700,000 in federal and state money to companies and at least one City Hall insider without valid contracts, competitive bids or even getting City Council approval, according to an audit released Thursday by the state controller’s office.

The audit is the third in a series of financial examinations that accuse current and former city officials of imposing illegal taxes on residents, helping themselves to huge salaries without authorization and loaning hundreds of thousands of dollars to City Hall staffers.

Among the companies that received state and federal tax dollars was an engineering firmed owned by the city’s former planning director, Dennis Tarango. D&J Engineering was paid nearly $100,000 from an oil-recycling grant even though the planning director’s company did not have a contract for the work.

The audit said the payment may be illegal and, because of Tarango’s job with the city, raises questions about a conflict of interest.

Earlier audits showed that, in all, Tarango's firm was paid more than $10 million for work with the city but did not have a valid contract.

The findings in the latest audit could put the small, troubled city at further financial jeopardy if it is forced to pay back the state or federal funds. Already, the city has been ordered to roll back property taxes, refund taxes and pay back thousands in improperly collected fees.

As with other audits issued by state Controller John Chiang, much of the blame is heaped on Rizzo. The reports says Rizzo may have used the public funds for personal gain and that, minimally, the expenditures raise serious questions about favoritism and other improprieties.

James Spertus, Rizzo’s attorney , was highly critical of the controller, saying he doubted whether the auditors had seen all the information.

"The fact is that Mr. Rizzo hired outside law firms and counsel to give advice to the city on the kind of issues the state controller is trying to characterize as wrongdoing, and I find that very hard to take credibly,” Spertus said. “The state controller more than any other investigating agency is trying to hold Mr. Rizzo accountable for any conceivable wrong he can identify at the city."